The Nexus between Livestock Products and Government Supports: A Time Series Examination on Turkey

Abstract

The aim of the study is to examine the relation between the amount of production of livestock products and the government support given to producers of animal products in the case of milk and beef meat. For this purpose, the error correction models for milk and beef meat were estimated for Turkey based on the data over 1986-2016. When looking at the short-term Granger causality from the cointegration relation, there was no statistically significant causality relation between the variables in the milk production equation, while bidirectional Granger causality was found among all variables in the beef meat production equation. Considering long-term coefficients are examined, there is a negative relationship between milk production level and market price differentiation, and there is a positive relationship with producer supports. On the other hand, there is a positive relationship between beef production and market price differential, but a negative relationship with producer supports. Findings support the idea that policies such as monetary producer supports as well as custom regulations beyond monetary supports should be differentiated according to product types. Jel Codes: Q10, Q18, Q28, H20